South Korea E-commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

South Korea E-commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The South Korean e-commerce market is anticipated to grow with a CAGR of 25% during the forecast period (2022- 2027). Retail is being rewired by digitally inspired innovations that go beyond channel shift. Owing to the COVID-19 pandemic, new business models have gained traction, and commerce ecosystems have evolved, altering how retailers and brands interact with digitally connected audiences. The digital revolution has resulted in a more convoluted and fragmented retail market during the previous decade. Marketplaces, direct-to-consumer brands, social commerce, live selling, and voice commerce are just a few examples of the various paths to the end consumer.

• According to International Trade Administration, E-commerce is a significant part of Korea's entire consumer industry, and it is continually rising. Korea is a technologically advanced country, with about 99.5% of Korean households having an internet connection through a computer, mobile phone, or another device.
• According to a Bank of Korea survey, credit cards are the most popular payment method for clients utilizing personal computers (PCs) and mobile platforms. Electronic payment services via PC and mobile are becoming more popular as online shopping continues to develop. The average daily utilization of the Payment Gateway (PG) service based on credit cards exceeded 16 million. Furthermore, mobile payment and digital wallet services like Samsung Pay and Naver Pay are gaining popularity.
• E-commerce is driving the Korean retail market forward. Traditional retailing outlets are hurting as e-commerce grows rapidly. Consumers prefer to window shop in conventional stores but turn to retail internet sites to get the greatest bargains and complete their purchases. Convergence with other platforms is one of the most critical trends in internet retailing. Consumers want a one-stop shopping experience that includes product reviews and prices, purchasing, and paying with new online payment solutions associated with the platforms. Internet portal sites, social network services, TV home shopping, and other platforms now all have online shopping functions, and the popularity of their platforms is growing.
• The majority of people's time and money is spent online. As a result, the rise in cybercrime and cyber dangers is unsurprising. As data theft and security breaches grow, so does the need to improve cybersecurity. Investing in more secure servers and checkout processes can remedy such issues. Consumers, above all, demand assurances about the security of their personal and financial data.
• To stay relevant in a rapidly digitizing market, Lotte Shopping, one of South Korea's leading conglomerates in the store-based retailing channel, established Lotte ON. This platform unites the online storefronts of Lotte's retail brands. While COVID-19 undoubtedly signaled to the corporation that physical retail locations would be restructured beginning in early 2020, Lotte's Shopping aims to produce a seamless omnichannel capable of integrating its online and offline stores. Lotte ON wants to give customers individualized shopping experiences by making product recommendations based on their previous purchases.

• According to the Ministry of Science and ICT (South Korea) survey, as of September 2021, almost 97.9% of respondents aged 20 to 29 had purchased products and services (including making reservations) on the internet.
• According to data from Ookla, internet users in South Korea may have expected 104.98 Mbps is the average mobile internet connection speed via cellular networks at the start of 2022. According to Ookla's data, the Republic of Korea's median mobile internet connection speed rose by 19.42 Mbps in the year leading up to the start of 2022. Such an increase in broadband speed may encourage customers to purchase goods online.
• Remote working due to COVID-19 is one of the traffic drivers of the internet in 2020. With 5G set to capture a considerable number of early adopters, it is expected to continue high growth in the region. In South Korea, one of the leading adopters of 5G connections in the area, the average monthly data usage per 5G subscriber is more than 25GB, according to Ericsson. The data traffic per smartphone is poised to reach 41GB per month in 2026.
• The increasing usage of the internet in the region and the developments that are happening with the 5g technology will drive the customers to significantly give thought to the online purchase of goods. 5G, characterized as Enhanced Mobile Broadband (eMBB), is expected to improve mobile internet users with higher speeds and better user experience in dense or high mobility environments in the country.

• According to the Ministry of Science and ICT (South Korea) survey, as of September 2021, almost 97.9% of respondents aged 20 to 29 had purchased products and services (including making reservations) on the internet.
• According to data from Ookla, internet users in South Korea may have expected 104.98 Mbps is the average mobile internet connection speed via cellular networks at the start of 2022. According to Ookla's data, the Republic of Korea's median mobile internet connection speed rose by 19.42 Mbps in the year leading up to the start of 2022. Such an increase in broadband speed may encourage customers to purchase goods online.
• Remote working due to COVID-19 is one of the traffic drivers of the internet in 2020. With 5G set to capture a considerable number of early adopters, it is expected to continue high growth in the region. According to Ericsson, in South Korea, one of the leading adopters of 5G connections in the Asia Pacific, the average monthly data usage per 5G subscriber is more than 25GB. The data traffic per smartphone is poised to reach 41GB per month in 2026.
• The increasing usage of the internet in the region and the developments in the 5g technology will drive the consumers to significantly give thought to the online purchase of goods. 5G, characterized as Enhanced Mobile Broadband (eMBB), is expected to improve mobile internet users with higher speeds and better user experience in dense or high mobility environments in the country.

In South Korea, the competition in the E-commerce market has increased as the customer's adoption of online sales channels has grown.The market is moderately fragmented. This growth is aided by an increase in internet penetration. Further, brands such as Coupang Corp, Naver Shopping, and many more expand their reach by providing customer-centric services that enhance customers' online shopping experience.

• February 2022 - New Vessel has funded an undisclosed seed round led by Naver, CKD Venture Capital, and Wooshin Venture Investment, with participation from Lighthouse Combined Investment and S&C Networks, to enter the South Korean and Japanese markets. The fresh funds will be used to buy Korean and Japanese e-commerce firms as well as hire more brand managers, marketers, and supply chain managers.
• March 2022 - Una Brands, a Singapore-based e-commerce aggregator, has teamed with KlickBrands, a South Korean peer, to increase its presence in the country. South Korean e-commerce firms will benefit from the strategic relationship as they expand locally and into new Asian markets. Since its start in 2021, Una, one of Asia's major e-commerce aggregators, has grown a presence in Singapore, Australia, India, China, Indonesia, Malaysia, and Taiwan.

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